How To Pay Your Housing Loan In Singapore

Paying your housing loan allows you to become debt-free faster and sell your current property without hassle. It is essential to go about it the right way, though.

This guide will explain how to pay housing loan using CPF and talk you through several alternatives.

You will learn how to use different payment services and calculate your redemption amount.

Keep reading to learn more.

How To Use Your CPF OA To Pay For Your Housing Loan

You can use your CPF Ordinary Account (OA) for several things, from HDB loan repayment to education loans and investments. Here is how the CPF OA can help pay your HDB loan:

1. Get A HDB Loan

You can use your CPF OA to obtain a loan in the first place. You can also use the money in this account for downpayment and stamp duties or legal fees.

2. Get A Bank Loan Or Purchase Private Property

In this scenario, you will need to hire legal help to write and submit the:

• Letter of Authorisation
• Declaration
• Consent
• Agreement form

Before getting access to the CPF savings, you need to pay:

• A minimum of 5% downpayment in cash
• The balance purchase price outweighing the property’s value
• Option charges

3. Pay Your Loan Installments

You can pay a HDB loan using CPF through monthly installments. You can apply online to direct money from your CPF towards your monthly loan installments for:

• HDB loans
• Bank loans

How To Pay For Your Housing Loan Installments

If you want to use CPF to pay a housing loan, you first have to check if there is enough money in your account. Then, follow the steps below regardless of the type of loan you have (i.e. HDB or bank loan):

• Log into your account on the CPF website using your Singpass.
• Click on “My Request”.
• Click on “Property”.
• Click “Use CPF for my Property”.
• Select “Property Details”.
• Choose “Revise Monthly Instalment”.
• Submit your application.

Payment Modes

There are several ways of paying your HDB loan:

CPF

To pay for your housing loan using your CPF, you must:

• Own the property.
• Authorise these deductions from your CPF OA by applying with HDB. This deduction will happen on a Sunday between the 6th and the 12th of each month.
• Be insured under the CPF Board’s Home Protection Scheme (HPS) if you want to utilise your CPF OA for your housing loan installments.

Here is the step-by-step process of how to pay back the CPF housing loan:

• Visit the My HDBPage.
• Log in.
• Click on “My Flat”.
• Choose “Purchased Flat”.
• Choose “Financial Info”.
• Click on “Other Related Services”.

GIRO

You can pay your housing loan using GIRO, but you must fill in an Interbank GIRO (IBG) application and send it to HDB. You can find the pre-filled form:

• For flat owners: Here
• For non-flat owners: Here

Pro tip: Ensure you have enough money in your account. Otherwise, HDB will impose a penalty charge and a late payment fee.

eNETS Debit

The eNETS Debit Service allows you to pay your housing loan installment if you have an online banking account at one of the institutions below:

• DBS Bank/POSB Bank
• OCBC Bank
• United Overseas Bank
• Citibank
• Standard Chartered Bank

Internet Banking

Use your bank’s internet banking services to pay for your housing loan if you have accounts at:

• DBS Bank/POSB Bank
• OCBC Bank
• United Overseas Bank

Partial Capital Repayment

If you want to repay your housing loan partially, you can either:

• Shorten your tenure, keeping the same installment quantum: This is best for becoming debt-free faster and lowering the total loan amount
• Keep the same term, reducing the amount you pay each month: This may work if you want to relax your monthly expense budget

Here’s how to repay the CPF housing loan partially if you choose the first option:

• Log into the My HDBPage, using your Singpass.
• Click on “Other Related Services”.
• Choose “Partial Capital Repayment”.

Afterwards, HDB will send you instructions to finalise the process.

Here’s how to repay the CPF housing loan partially if you choose the second option:

• Use the HDB e-Appointment service to set a meeting.
• Visit the selected branch to pay your housing loan earlier.

Pro tip: You can also use other payment methods to settle part of your home loan earlier. These include:

GIRO

• PayNow via SGQR at participating banks
• HDB cashier order
• Cheque
• AXS channels
• eNETS Debit at participating banks

Paying Off Your HDB Loan Early

Now that you have learned how to make partial refunds to your HDB loan, here is how to pay housing loan early entirely:

Online

• Log into the HDB website using your Singpass.
• Click on “My Flat”.
• Choose “Purchased Flat”.
• Click “Financial Info”.
• Click “Other Related Services”.
• Choose “Redemption of Housing Loan”.

After submitting your application, it will take three working days to receive an answer from HDB.

In Person

• Use the e-Appointment service to make an appointment at a HDB branch.
• Go to the arranged meeting and fill in the PHS9 form to withdraw money from your CPF.
• Wait for the system to process your submission for three to five working days.

Remember: You cannot redeem your housing loan instantly. The redemption date is scheduled one month after receiving your application. During this time, HDB computes the redemption amount, sending you an acknowledgement and instructions to reimburse the loan.

Pro tip: Learn how to calculate the amount you have left to pay to ensure you have enough money.

Estimated Redemption amount = A + [A x (R/12) x (N/M)]

• A = Remaining loan balance
• R = Annual interest rate
• N = Number of days from the beginning of the redemption month up to the proposed redemption date
• M = Number of days in the redemption month (when you actually repay the loan)

Here is an example:

• Submission date: 18 Oct
• Proposed redemption date: 18 Nov
• Remaining loan balance: $200,000
• Interest rate: 2.6%

Therefore:

• A = $200,000
• R = 2.6%
• N = 18 (There are 18 days from the beginning of November until your redemption date on the 18th)
• M = 30 (November, your redemption month, has 30 calendar days)

Estimated redemption amount = $200,000 + [$200,000 x (2.6/12) x (18/30)] = $225,999.99

Late Payment Charges

The late payment interest rate is reviewed and fixed yearly on 1 Apr. Currently, this rate is 7.5% per annum until 31 Mar 2023.

Apart from the late payment interest, you will have to pay late payment charges of $0.05 at the end of each month.

Pro tip: That sum might not seem much, but the interest rate and late penalty fees accumulate monthly.

You can reimburse this amount either using GIRO or an HDB cashier order.

Should I Pay Off My HDB Loan Using CPF?

Using your CPF has several advantages:

• You can become debt-free faster
• The interest rate is lower than any other type of loan
• The process is straightforward

On the other hand, you would be losing the interest that accumulates in your CPF account. Plus, you cannot sell your current property without refunding the CPF loan.

U Credit can help.

We have one of the most affordable interest rates in Singapore, and our expert agents can customise convenient loan packages according to your financial situation. Customers come first with us – always.

Contact our experienced loan officers now, who will be more than happy to assist you. Or apply for a loan with us now.

Renee Koh

As a customer engagement and content marketing lead, Renee is focused on one thing: Making customers happy and keeping them informed. She taps on her experience in banking and e-commerce to perform her duties and loves how fickle customers are. That way, she can keep learning new skills to keep up with them, reasoned the proud mum of a Jack Russell.